World Economy

Korea-China FTA May Hurt Small-Timers

Korea-China FTA May Hurt Small-TimersKorea-China FTA May Hurt Small-Timers

Visit Incheon Port International Passenger Terminal and you’ll quickly spot huge but shabby carriers, boxes sealed by tape numerous times, and middle-aged people with mobile phones. These are small-time traders who make money selling goods from South Korea to China or vice versa, including cosmetics, small home appliances, and agricultural produce.

That might change in the near future, however, as South Korea and China have recently concluded a free trade agreement. Under the deal, the two countries will be required to eliminate their import tariffs on more than 90 percent of all products traded between them within 20 years, of the deal taking effect. This is likely to have a major impact on small-time traders, who have benefited from the tariff differences between the two countries.

The terminal links South Korea to China’s Qingdao or Weihai, where many Korean-Chinese reside. It has always been so crowded with these traders that it has created a special passageway for them to minimize inconvenience to tourists, The Diplomat reported.

In fact, Incheon terminal has already seen a decline in the number of these traders in recent years. According to this terminal center, 918,437 passengers used the terminal last year, of whom roughly 30 percent were traders. That is down significantly from 2011, when an estimated 45 percent of passengers were traders.

Another popular hub for the traders, Pyeongtaek Port, has also seen a drop in numbers. According to Gyeonggi Pyeongtaek Port Corporation, about 66 percent of passengers were estimated to be small-time traders in 2011, falling to 51 percent in 2013.

“Since South Korea and China started talking about the FTA deal, the two countries have beefed up regulations on the traders by stressing negative aspects such as the smuggling of unauthorized products,” said Kim Jeong-hoon, a team leader at Gyeonggi Pyeongtaek Port Corporation’s Marketing team.